Stock market crash

From Free net encyclopedia

Image:Black Monday Dow Jones.png A stock market crash is a sudden dramatic loss of value of shares of stock in corporations. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles such as the dot-com boom.

The most famous crash, the Stock Market Crash of 1929, started on October 24, 1929 (known as Black Thursday), when the Dow Jones Industrial Average dropped 50%. This event preceded the Great Depression. The succeeding years saw the Dow Jones drop a total of over 85%. Richard Armour, in his satirical American history book It All Started With Columbus, remarked that the 1929 crash occurred "near the corner of Dun and Bradstreet".

There was also a crash or "adjustment" on Monday October 19, 1987, known in financial circles as Black Monday, when the Dow Jones lost 22% of its value in one day, bringing to an end a five-year bull run. The FTSE 100 Index lost 10.8% on that Monday and a further 12.2% the following day. The pattern was repeated across the world.

The stock market downturn of 2002 was part of a larger bear market and a Dot-com stock market bubble as well as Enron corruption that took the NASDAQ 75% from its highs and broader indices down 30%.

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Books on stock market crashes

Batra, Ravi 1987, Great Depression of 1990, Simon & Schuster, New York, NY. ISBN 0939352028
Batra, Ravi 1999, Crash of the Millennium, Harmony, New York, NY. ISBN 0609605127
Kindleberger, Charles P. 2000, Manias, Panics, and Crashes: A History of Financial Crises. Wiley & Sons, New York, NY. ISBN 0471389455
Shiller, Robert J. 2001, Irrational Exuberance. Broadway, New York, NY. ISBN 0767907183